RESOURCES | GUIDES
Key Account Management Best Practices
Many of our clients ask us to assist them in implementing a planning process to manage their largest and most strategic IDN relationships. Often, one is left with the idea that implementing KAM is as simple as running a two-day training program. Unfortunately, this is not the case.
Well in advance of a training on process, a plan needs to be prepared considering five key areas:
Executive Sponsorship
To be successful, a KAM program must be a business initiative supported by the most senior leaders in the organization. It must not be viewed as a sales initiative. Executive leaders must agree to be actively engaged in communicating, setting strategy, developing relationships and approving plans.
Account Selection
Our recommendation is that account selection be made based on criteria additional to historical revenue. Many successful organizations use a tier structure to segment their accounts and allocated assets to these accounts based on this structure. Resource allocation would similarly be defined. For example, all tier one accounts get a dedicated cross-functional team. Tier to accounts are assigned an account manager who pulls in people as necessary, etc. The segmentation strategy needs to include some thought around which accounts are more pre-disposed to develop “partner” relationships. Perhaps the accounts that are very transactional and price driven receive limited resources due to the cultural nature of how they work with industry.
Team Selection
A cross-functional leadership team can be put in place to participate in strategy development and most importantly, to clear any potential internal barriers to the success of the team and the implementation of the strategy they develop. Team members should be selected based on the needs of the account as well as who may be required to execute the plan. Team satisfaction should be measured.
Metrics
Measuring the success of a relationship management program should not always be based on closed opportunities. Certainly, increased margin and market share are important lagging indicators. However, in long term relationship development, leading indicators are crucial in order to access the viability of the strategy. These leading indicators could include new opportunities identified, new relationships developed, mature relationships improved or enhanced and so on. One of the best methods of identifying these advances is through personal interviews with key players on at least an annual basis.
Coaching
When KAM programs fall-down, it is rarely because the strategies weren’t sound. Most often these plans fail because of a lack of follow up on the actual implementation. This is the responsibility of the leadership. Plans should be reviewed with a frequent cadence by the leadership team. Team meetings, including the field sales organization should be conducted to take advantage of the SAMs knowledge and to assist field sales in tying their solution to strategic initiatives.
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Planning prior to the implementation of any account management methodology is imperative to implementing a key account management program.